SHANGHAI, May 10 (SMM) – Inventories of hot-rolled coil (HRC) across social warehouses and steel mills in China rose for a second straight week this week, reflecting waning support from fundamentals.
Overall HRC stocks inched up 0.2% between May 5-9 and stood at 3.04 million mt as of Thursday May 9, after it rose 2.7% between April 25 to May 5, SMM data showed.
This was driven by increases in social stocks, which expanded for two consecutive weeks to 2.13 million mt, up 1.9% from May 5 but down 4.4% from a year ago.
Stocks across steel mills, however, snapped two consecutive weeks of gains and fell 3.6% during May 5-9, coming in at 911,300 mt as of May 9, down 4.9% year on year.
Overall HRC stocks as of May 9 stood 4.5% lower from a year earlier.
Prices of HRC across Chinese markets averaged 4,040.8 yuan/mt this week, up 23 yuan/mt from the prior week. Despite growing inventories, prices continued to climb as it took time for cargoes to reach buyers.
In the face of domestic and external challenges, HRC prices are unlikely to continue its strong performance.
While activity in the infrastructure sector appeared robust, excavator sales, a proxy for infrastructure development, saw a smaller year-on-year increase in April.
As the auto sector remained sluggish, the price spread between cold-rolled and hot-rolled materials narrowed.
Export orders, meanwhile, took a hit from the renewed trade conflict between the US and China.
